Pacific Medical Supply Company (Essay Sample)

PACIFIC MEDICAL SUPPLY COMPANY
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Questions 1
Sales just like any other profession or sport, one can be gifted in that field. In essence, this means that people like Nicole are naturally talented in their area of specialization. It can be seen by how she could bond freely with the clients for example by going out with them. On top of that, her natural tendencies show up on how her sales results kept on increasing over the years.
Despite such people being naturally gifted, they need help from the experienced ones to become even better. In our case, Nicole was naturally talented, and her performance showed that she did not need any help as per the result. However, if she had gotten more help her work could have been even better. People who could her helped Nicole included Jim who had over 25 years of sales experience and the other salespersons who have the know-how of that particular market. The downside to this is the advice that she was going to get, could be detrimental. For example, due to work jealousy she could have been misadvised so that she can fail. Secondly, she could have been advised but not motivated to work hard enough to achieve her goals as her fellow employees were in a state of comfort and no ambition or drive to aim higher. All in all, it is better to get the advice from a bond between the employees, make the new employees feel welcomed, help the likes of Nicole know their working environment and also give them a head start on what to expect a similar view held by Ilya (2015).
Through Nicole's hard work and achievements, Jim could tap into this to make the other Pacific Medical Supply Incorporated's Sales personnel better. Money is a great motivator Jim could have used Nicole's commission to show the other employees how much they would get if they matched or bettered her performance. Nicole being the friendly type could also share her secrets to success with the other employees and help them learn from her. By recognizing Nicole's excellent performance, Jim could have also used that as a motivation by showing that he appreciates hard work and also is checking the employee's performance.
Question 2
The flow in the commission structure is that it is increasing by a much bigger percentage difference. The large margin makes the commission to those who make higher sales have a wider salary gap. Even though this is a motivation tactic, it can work by demoralizing those who earn less. This can be shown in the table below.
Table 1
Sales per month

commission

Difference

Less than $100,000

8.5%


$100,001 - $200000

10%

1.5%

$200,001 - $300000

13%

3%

$300,001 - $400000

18%

5%

$400,001 - $500000

25%

7%

Another shortcoming is that it does not show what happens when an employee makes a sale of more than $ 500, 000 in a month. As a result, it limits ambition as the brilliant minds such as Nicole are limited psychologically to $500,000 as nothing is highlighted in regards to above that.
Question 3
Arguments can be put forward for both paying more commission for products with a higher profit margin and a smaller commission for small profit margins. As per the current structure, profit is calculated based on sales returns and which item is sold. This means that in essence products that have a higher profit margin does not get one a higher commission. In Pacific Medical Supply it is the disposable plastic instruments and syringes that are imported from China which generate a margin of 80% as compared to the others which fall between 40% and 50%. The effect of the profit margin model is that specific product will be pushed more by sales personnel so that they can earn more commission. The advantage of this is that it will generate better incomes for the business as it will bring better incomes.
In my own opinion giving commissions based on the margin is dangerous